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Banks back share rally

The Australian share market has closed higher, led by the major banks.

The benchmark S&P/ASX200 index had lifted 29.5 points, or 0.59 per cent, to 5,063.4 points, while the broader All Ordinaries index had added 28.3 points, or 0.56 per cent, to 5,082.9 points.

On the ASX 24, the March share price index futures contract was up 45 points at 5,040 points, with 25,750 contracts traded, according to preliminary calculations.

‘‘Momentum in financial stocks continues to be there,’’ IG Markets market strategist Evan Lucas said as investors continued to support the banks in the wake of a strong earnings report from the Commonwealth Bank last week.

‘‘The banks are absolutely driving this market.’’

Mr Lucas said Commonwealth Bank and telco Telstra were not weighing upon the market too much on Monday despite going ex-dividend.

He said miner Rio Tinto had also jumped back after being oversold on Friday after its full year earnings report in which the company reported a statutory loss but an underlying profit.

Mr Lucas said a lot of mid-cap stocks had released their earnings reports on Monday, and overall they were fairly pleasing.

He said investors were looking forward to Wednesday, when global miner BHP Billiton reports its financial results.

Among the major banks, ANZ rose 73 cents to $28.50, National Australia Bank gained 64 cents to $30.15, Westpac jumped $1.05 cents to $30.20, and Commonwealth Bank was down $1.25 cents at $65.78.

Bendigo and Adelaide Bank was 32 cents richer at $10.17 as it said interest rates on deposit accounts may be about to fall as other sources of funds become cheaper and more accessible for banks.

Steelmaker BlueScope soared 58 cents, or 15.38 per cent, to $4.35 on news that its first half loss had narrowed.

Pacific Brands firmed 2.5 cents to 75.5 cents after the struggling clothing retailer said it had returned to profitability.

Drilling company Boart Longyear dropped 17.5 cents, or 8.18 per cent, to $1.965 after it said it expects the downturn in last year’s operating revenue to continue.

Construction giant Lend Lease fell 27 cents to $10.42 as it reported a 39 per cent profit jump.Packaging giant Amcor strengthened 23 cents to $9.14 as it lifted its first half profit by 16 per cent but said it would cut about 300 jobs.